2022 (7) TMI 323 - AT - Income Tax

Penalty u/s 271AAB - defective notice u/s 274 - As per assessee penalty notice so issued is defective as it does not disclose specific charge and secondly there is no concealed income as search took place prior to due date of filing of income-tax return - HELD THAT - A bare reading of notice demonstrates that notice relate to ingredients of penalty u/s. 271(1)(c) of the Act, it does not contain the ingredients of section 271AAB of the Act. Under these facts the notice is improper and is not in accordance with requirement of law. The assessing officer is expected to make his direction clear as to which clause of section 271AAB of the Act, he wishes to invoke. There is clear absence of such direction. Ld. counsel for the assessee has relied upon various judicial pronouncements in support of his contention that where the notice is being defective, therefore, no penalty can be levied or sustained. We observe that the issue is squarely covered in assessee's own case for the assessment-year 2015-16 2020 (8) TMI 905 - ITAT INDORE - Hence the same decision will prevail for assessment-year 2016-17. Since the penalty imposed in assessment-year 2015-16 was deleted, the penalty for assessment-year 2016-17 is also not sustainable. - Decided in favour of assessee.

Summary

Issues:
1. Appeal against penalty-order under section 271AAB for assessment-year 2016-17.

Analysis:
The appeal filed by the Revenue challenges the order of the learned CIT(A)-3, Bhopal, concerning the penalty-order passed by the learned ACIT(Central)-2, Indore, under section 271AAB of the Income-tax Act, 1961, for assessment-year 2016-17. The search conducted under section 132 of the Act at the premises of Moira Group of Indore revealed undisclosed income, out of which a portion related to the assessment year 2016-17. The penalty imposed by the assessing officer was challenged, leading to the present litigation before the ITAT Indore Bench.

The key contention raised by the Revenue was the deletion of the penalty amounting to Rs. 73,16,502/- by the learned CIT(A). The Revenue argued that the factual matrix of the surrender and assessment for both assessment years, 2015-16 and 2016-17, was identical, and therefore, the decision of the ITAT Indore Bench in favor of the assessee for the assessment-year 2015-16 should apply equally to the assessment-year 2016-17. The Revenue sought to apply the same decision to uphold the penalty imposed for the latter assessment year.

Upon careful consideration, the ITAT Indore Bench found merit in the arguments presented by the assessee's representative. The Bench observed that the issue was already settled in favor of the assessee for the assessment-year 2015-16, leading to the deletion of the penalty. Consequently, the Bench concluded that the penalty imposed for assessment-year 2016-17 was also not sustainable based on the same reasoning. Therefore, the ITAT upheld the deletion of the penalty made by the learned CIT(A) for the assessment-year 2016-17, resulting in the dismissal of the Revenue's appeal.

In conclusion, the ITAT Indore Bench dismissed the Revenue's appeal, pronouncing the order in accordance with Rule 34 of the I.T.A.T. Rules 1963 on 28.06.2022.